The stock exchange’s plan to support trading of tokenized shares presents new technical hurdles for the SEC and DTCC.
Nasdaq’s Sept. 8 filing to launch tokenized stocks is being called a landmark step for Wall Street, but experts warn the exchange could face major hurdles in adapting blockchain trading to existing U.S. settlement and regulatory systems.
If approved by the U.S. Securities and Exchange Commission (SEC), this would mark the first time tokenized securities are listed on a major U.S. exchange. But with the Depository Trust & Clearing Corporation (DTCC) already processing billions of equity trades daily, integrating blockchain-based settlement could be both costly and complex, experts say.
On April 9, the National Securities Clearing Corporation (NSCC), a subdivision of the DTCC that provides clearing, settlement, and risk management services for U.S. financial markets, processed a new record of $5.55 trillion in transactions.
“The bigger issue is the need for a new settlement layer for trades of tokenized equities. Here, somewhat surprisingly, Nasdaq seems to be relying on DTCC to build a new settlement system,” Eli Cohen, General Counsel at Centrifuge, told The Defiant. “This will be costly to do for DTCC and bring little or no financial benefit as DTCC already settles 100% of on-exchange equities trades for the U.S. market.”
He also explained that another challenge is the need for the SEC to adapt and amend regulations for tokenization. However, Cohen noted that the SEC has shown its willingness to make these changes, “and the Q3 2026 timeframe presumably reflects Nasdaq’s discussions with the SEC on this.”
Blockchain vs. Legacy Infrastructure
Other experts agreed, saying that even though the filing is historic, the challenges of connecting blockchain networks to the traditional financial system could delay its rollout.
Karia Samaroo, founder and CEO of xTAO, highlighted that ensuring Nasdaq’s tokenized assets can seamlessly integrate with its legacy infrastructure, “while at the same time maintaining the decentralized nature of the underlying blockchain that is being used,” will be difficult.
“We also still need a clear regulatory framework, particularly as it pertains to market structure, primarily because lacking such a framework could generate greater risk,” Samaroo said. “But it does seem like legislation on market structure is going to pass in the coming months, given the success of the Clarity Act.”
The Clarity Act – which was passed by the House of Representatives in mid-July but is still awaiting passage by the Senate and President Donald Trump – aims to provide a clearer U.S. regulatory framework for digital assets and define what qualifies as “digital commodities.”
“It’s important to remember these shares are being issued as securities and will functionally operate no differently than a traditional share class.” Mike Maloney, CEO and founder of Incyt, told The Defiant. “Since these are new issuances, they represent dilution of existing equity rather than a cross-chain transfer.”
Maloney added that the shares will be tied to new capital raises and control will remain centralized with the Depository Trust Company (DTC) – a subsidiary and the central securities depository under the umbrella of DTCC – rather than being freely transferable.
Another smaller but still significant challenge is Nasdaq’s choice of blockchain, according to Kevin Rusher, founder of real-world asset (RWA) borrowing and lending protocol RAAC.
“Ethereum has seen a growing number of RWA projects and institutional interest, but it would have to be a high-throughput Layer 2 solution to handle Nasdaq’s order book,” said Rusher. “That’s if Nasdaq were to choose a public blockchain – it may consider a permissioned chain to have greater control of the risks.”
Either way, Rusher added, there are many questions related to infrastructure and interoperability that “must be ironed out in the background.”
‘Breakthrough for Credibility’
However, other experts framed the move as a breakthrough for blockchain’s credibility and institutional engagement.
“It’s exciting to see this because it means plugging in tokenized offerings with traditional distribution channels, which already have individuals and businesses leveraging that infrastructure – in this case, Nasdaq,” said Morgan Krupetsky, VP of Onchain Finance at Ava Labs.
Krupetsky added that this underscores the importance of ensuring tokenized equities provide the same shareholder rights as traditional stocks, “which several on-chain offerings currently do not.”
The filing also showcases how far tokenization has come since early experiments, according to Marcin Kazmierczak, co-founder of RedStone, who said tokenization is gaining momentum for three reasons: more supportive regulations, matured blockchain technology, and active participation from major institutions like BlackRock and Apollo, which brings legitimacy, capital, and faster adoption.
BlackRock currently manages the largest tokenized market money fund (MMF), BUIDL, which is issued by Securitize and has a total asset value of over $2.2 billion, per RWAxyz.
Meanwhile, the same day as Nasdaq’s SEC filing, asset manager Fidelity quietly launched its own MMF dubbed Fidelity Digital Interest Token (FDIT), which has already amassed more than $203 million in total asset value.
These developments strongly indicate that tokenized equities are no longer just an emerging asset class, according to Samaroo. “Increasingly, they’re becoming valuable assets for institutions,” she said. “Gaining recognition from a legacy name like Nasdaq fosters even more public trust and institutional adoption for the overall crypto industry… Nasdaq, in short, is pushing crypto where it ultimately needs to be.”
Competition Heats Up
The Nasdaq’s move comes as the race for tokenized equities continues to heat up, with numerous crypto-native firms vying for market share.
xStocks, a Solana-based platform developed by Backed, launched on June 30 and allows users outside the U.S. to trade blockchain-based versions of dozens of U.S. stocks and ETFs fully backed 1:1 by the underlying securities. Kraken currently offers xStocks on Solana, Tron, BNB Chain, and Ethereum.
Others have quickly followed suit: In June, Gemini partnered with Dinari to offer tokenized Strategy (MSTR) stock to European users, with additional tokenized stocks and ETFs expected soon. Robinhood has also been vocal about its plans to offer more than 200 tokenized U.S. stocks to European investors, expanding to 2,000 by the end of 2025.
“The main difference between the offerings that already exist and Nasdaq’s proposal is that tokenized stocks traded on the US exchange would give holders the same rights as owning a stock in a company,” Rusher said. “Until now, this has been the biggest criticism of existing offerings, like the tokenized private stock tokens launched by Robinhood earlier this year.”
He added that in addition to being available on a leading national exchange, the move opens up “broad access to retail investors in a way smaller investment platforms simply can’t,” and also provides extra reassurance regarding legitimacy and compliance.
Charlyn Ho, Managing Member and Founder of Rikka, noted that, unlike existing platforms such as Galaxy, Backed’s xStocks, and Dinari, which create separate tokenized versions of stocks – a “fancy way of saying ownership of stocks can be traded on a blockchain” – Nasdaq’s approach would allow investors to buy shares with either traditional or tokenized settlement.
“The tokenized securities would be cleared and settled through the Depository Trust Company, preserving standard investor protections,” she said. “Further, the regulatory environment in which Nasdaq operates is more clear and more established than new DeFi entrants, since it is a long-established regulated exchange working directly with the SEC, DTC and FINRA.”
